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4 Biggest Challenges to Business Strategy Development

Updated: Jun 6, 2021

Today, growing a business has become far more complicated than ever. To scale a company to newer heights further is contingent on solving a number of business challenges. Whether it a small company or large company, staying ahead of the curve has become a herculean task.

If you choose to risk too much, you may have chance to loose and if you wish to remain comfortable in your position, it is likely that competitors will grab your market share and steal your customers. Therefore, defining an effective business strategy that can help organization scale and evolve with time is paramount for a profitable venture. Here we will discuss, 4 biggest challenges companies face in the process of defining their business strategy.

1. Designing Systems and Processes

Business process management, as defined in Wikipedia, is the discipline responsible for applying techniques and methods to discover, model, analyze, measure, improve, optimize, and automate business processes. New processes evolve over time as the business penetrate new markets and hires employees. Whenever a new hire joins organization, they affect company's hierarchy, often leading to new tiers of management, operational procedures, and management workflows.

An ineffective set of processes will impact in-house and external communication, the company's morale, the efficiency of hiring new people at scale, and the profitability across the onboarding of new roles.

2. Lack of Direction and Vision

Companies operating without a long term vision are clearly walking against stream and threatened by organizations with a clear agenda in place. Whether million dollar or billion dollar corporation, they will easily drop out of a competitive landscape unless they keep innovating, attracting new markets, and staying on top of the latest innovations.

The company management should leverage the power of SWOT Analysis frameworks and identify the missing links in their leadership strategy. This will help as the entire organization as a 'reality check' instrument for self assessment.

3. Coping with Market Competition

Generally it is seen that younger startups fail to define their unique competitive advantage among established giants. Industry leaders on the other hand, miss stealth startups, rapidly aiming at their target market, revealing their weaknesses and comping up with a counter offer. A smart workaround is targeting new or upcoming markets for higher profit margins. Acquiring the majority of a market in a less competitive area can generate enough buzz to bootstrap the business in 'red ocean' territories harder to penetrate at first.

Differentiating while niching down is a common strategy for starting businesses that want to overcome the challenges of a broad pool of successful vendors in the space.

4. Keeping Up with Market Transformations

Adapting to market transformations and technological innovations isn't easy at scale. Old-school businesses who couldn't train their staff basic computer operator skills struggle to operate in a competitive digital environment.

Advertising in newspapers and social media is a different game. Being 'up-to speed' with the latest business, digital, economic and political trends isn't easy. We may be following the industry journals, but groundbreaking innovations are deployed quietly, emerging globally once they get enough traction for scale.

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Pankaj (MBA, Founder & CEO, 51K Growth Hub) is senior industry expert with 22+ years of Industry Experience. He is a globally certified professional, senior industry expert, leadership coach and corporate trainer. He is adept at delivering result driven training programs which dramatically scales up participant morale and helps speed up exponential organisational growth.

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